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tv   [untitled]    February 16, 2012 4:00pm-4:30pm EST

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could you take some time and describe that? >> based on the evidence we all use, by the independent arbiters, allowing the bush tax cuts to expire as scheduled would fact 2% to 3% of small businesses. >> can you describe what kinds of businesses? >> that would include businesses that are neither small nor of moderate nor your typical main street hardware store. because by definition any partner in a law firm or a lobbyist is treated as a individual person. if that person, partnership makes more than $250,000. we are proposing to raise their tax rates.
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we did that because, like in the '90s, they can handle it because that was a time of large economic growth. >> so that population in small businesses does not even come close to looking like mom and pop businesses that we -- >> a tiny fraction of businesses affected by this would meet that definition of a mom and pop store. to meet that definition, they would have to be a mom and pop store, employee people, and after expenses earn more than $250,000 a year. i know a lot of people don't think that's a lot of money. but we're proposing to raise -- and you have to look at the effective tax rate, a moderate increase in their effective tax rate to basically where it was in the second half of the '90s,
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frankly small businesses would love to have the economy that behad a that time. >> so for the folks that are watching that, folks understand what you're talking about, a small business that i guess would be under the s-corporations -- >> it's businesses formed as partnerships and have pass through income. >> versus the small --a we go to and trade on the corner, family businesseses, family restaurants? >> you have to have income after expenses more than that threshold to be caught by it and most of those 2% of businesses get caught by that, about 50%, maybe slightly higher make more than a million dollars in income after expenses. >> thank you very much, i appreciate that time. >> mr. flores?
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>> thank you secretary geithner for joining us today. i want to continue the conversation that my colleague reed ribble started. i came from a perfectly good job in the private sector, but things were happening that i thought would damage the futures of my children. every decision i make, not only affects next year, the next five years, the next ten years, it affects her when she's 75. so let's put figure 12 up now if we can. now it's 265. -- 2065. and i know you think that these projections are no good. if you want to, we can go to figure 3, directionally, is it -- >> after two or three --
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>> even what omb says that after 2022 we have got a problem. that things begin to deterior e deteriorate. >> i'm in violent agreement with you, just because it doesn't start to grow in the second or third decade-- >> that's where i'm going. >> why would a budget be prepared that would kick the can down the road. let's say it's 2065 and your granddaughter has just been elected to be secretary of the treasury? how are you going to tell her to finance this? >> i hope for her sake that she's not. i think we fought a very hard fight to lock in reforms that on c
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cbo -- that would grow over time too. we're making a difference on that process. >> okay. >> and if we can find a way, we got to go beyond that, we would be happy to do that. our problem is that the way you have laid out to do that, in our judgment would shift too much of the burden to a middle income reti retiree. >> how would you fix this? these are your projections. >> so what i would do is i would lock in a sustainable outcome for the next decade and i would do that as quickly as we can. and then i would take the experience we will have at that point and what we're doing to help people use health care more
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efficiently. chairman ryan deserves enormous credit for this, the basic problem is what model of how we deliver health care to people. what. >> what percentage of the total tax load should the top 2% pay? >> what is under the president's definition of fairness? >> should they pay more than they pay now? >> how much more? >> by the amount we laid out. >> so what is total tax revenues is that? >> we are proposing to put over a ten-year period of time and additional $1.5 trillion on the top 2% of americans.
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>> i was able to read that. >> i will be happy to give you the answer. but i think the basic division we have and this is a risk today, our judgment is in a system where we have progressive taxation, we think it's fair to have a modest effective tax rate. if we don't do that where are we going to find the money? you have to ask middle class people to pay for tax. >> my proposal would be less grow the economy. let's make small government large and make private sector large. chairman bernanke said just last week, if you had to geta choice between --
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>> mr. ryan. >> thank you, mr. chairman. it's interesting, and thank you very much, you're doing a great job, i'm enjoying just watching. i was just going to yield my time to a republican. it's much more entertaining. you'll take it. not that republican. it's interesting that the other side is saying simple bonn-bowles and we had a vote in this committee that talked about just the structure, not even the details that a lot of republicans voted against. you could not get one republican on the other side to raise their hand and say yes i would be for some tax increase on 1%, 2%, .5%
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of the top 1%. so that's the holdup. that's where the comp rise would come in. >> would you yield, mr. ryan. >> i would be happy to yield. >> house democrats voesed against simpson-bowles. >> put out alternatives in place of it. >> i agree with you, but i'm not the one sitting here blaming the administration for not adopting simpson-bowles. i remember exactly. and so the point is there's accusations being made against the administration when the very members of this committee who had voted against simpson-bowles and the reason is we can't get a republican to say they would raise taxes on warren buffett.
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we have this debate, we have all this nostalgia for ronald reagan. so i had to do some home work. tax increase by ronald reagan, highway revenue act of 1982, tax increase by ronald reagan. social security of 1983 tax increase by ronald reagan. deficit reduction act of 1984, tax increase by ronald reagan. on the budget reconciliation act of 1985. omnibus budget reconciliation act of 1987. continuing resolution of 1988, tax increase by ronald reagan. which we now look back and say that was a fairly responsible thing to do. and to think of this man, they
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have this big picture of ronald reagan, to think of him running in a republican primary today, we would be behind ron paul in the -- he would probably be out of the race right now. we got to think about this when we're talking about how we're all going to sit down and figure this out. and i think everybody's willing to make tough decisions, i think anybody watching this recognized that the speaker and the president had some semblance of a deal that couldn't get passed on ideology. if we can't at least ask warren buffett, so we can do the kinds of things that are going to lead to long-term investments. i have one question very briefly. when you say the tax rate is going to go up on someone who makes $250,000. is it for every dollar they make
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after $250,000? >> yes it would be after the margin. >> so everything at $250,000 would be taxed at the present tax rate and then -- what does that mean for someone who makes $350,000 a year, what would it mean as far as an increase goes? >> hundreds of dollars. >> thousands of dollars. >> it could be a thousand but it's modest and you're making the point well. >> so someone who makes $350,000 would pay an additional say $500 or $1,000 depending on how much they would say over $250,000, they would r as our country, as we see from these charts, we're
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all worried about our kids and our grandkids. no one has the high ground on that. it's how do we fix it. and we're saying asking these folks to pitch in $500 or $1,000 when they make $300,000 a year is a small tax increase. >> secretary geithner, i do want to take you up on your offer, would you send me what the top 2% would pay under your form loo? >> yes, sir. >> secretary geithner, it's always good to see you. i'm going to go in a different direction, i want to talk about a global minimum tax which is a concept that's been raised just recently for the first time. it was earlier this week when the white house economic council gene sperling said that we need
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a minimum tax so that -- yesterday in milwaukee, the president said something similar when she said that from now on, every multinational company should have to pay a basic minimum tax and every penny should go towards lowering the tax for every company who pays tax in the united states of america. generally what is this global minimum tax that we're starting to hear about? >> not as new as you think, because when chairman kemp laid out his plan for corporate tax return, last naturafall, he wan make sure that people could shift tax income and investment and avoid paying their fair
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share. the challenge is in trying to design it and set it at a level that is consistent with the objectives that we have which is to try to make sure that united states companies are successful. and we're going to outline to the congress the framework four corporate tax reform and in that context we'll give you a broader rationale for what we think the right balance is. >> let me tell you what concerns me. there was a reference in one of the publications that i read this week, an america built to last, which is a document the president put out right after he took office. an international minimum tax, the president's proposing to ensure that all american companies pay a minimum tax in their overseas profits.
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preventing other countries from attracting american business through a unusually low tax rates. >> you're giving us a little more credit for the idea than we deserve, because senator kemp proposed a similar strategy. >> how would you propose? >> we'll give you a little bit more detail in the next couple of weeks. because what you want to do, you want to look at the overall mix of a reduction in the corporate tax rate broadening the base. eand we have the same challenge. we have a tax system now, which at the margin encourages people to shift investment income, to lower tax jurisdictions and we would like to have a tax system that improves foreign investment
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in the united states, it's a hard thing to do, especially to do it in a way that's fiscally responsible. that's why we're proposing a tax reform without shifting income overseas. >> and you're not the first in the administration to say those words since i been here, get rid of loop holes, broaden the base. it's music to my ears. why isn't it in this year's budget? >> we talked about this in some detail in the spring, we put together a pretty comprehensive plan and we had to take a lot of time trying to convince -- the supercommittee wanted to take a run at it, we gave them a bit of time. >> listen, i'm mildly encouraged by your answer because i was fully expecting you to blame president bush for it so i'm glad it's my fault. >> you know, we have got a
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limited amount of time. >> with this rationale, if we're trying to keep attract american -- that philosophy concerns me because that same philosophy could be -- i work in a state that works very hard to lure business to south carolina with a favorable tax environment and i'll be very concerned if the administration starts using this language not only internationally but domestically as well. >> there's no risk of that. >> mr. chairman, first of all i want to associate myself with the remarks of my colleague from florida, ms. kcastor and the amount that -- we have the worst problem in the country in florida, i can't tell you the exponential increase in calls by some constituents to our office,
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a lot of our case work is having constituents limit the damage to their lives. so it's really important. >> i couldn't agree with you more. and we're happy to walk you through what we think the irs can do. >> that would be great. >> specifically and i had a chance to talk to mr. zines about this as well. but i was glad to hear some of our colleagues on the other side of the aisle in reference to their grandchildren and the concern they have about the long-term impact of deficits on their grandchildren's lives because, you know, that to me means that there's an opening for them to oppose the extense of the '01 and '03 -- the members that have made
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though-they have certainly been participants, willing, very enthusiastic participants of adding to the deficit in recent months. but my question of mr. zines yesterday and i wanted to ask you to proffer your opinion, in terms of the balance that the president proposed in his budget, in dealing with short-term and long-term, there is a cuts side of the ledger and a revenue side of the ledger. the economic experts, the folks who have testified here have all cautioned about the potential for short-circuiting the recovery that we're on, the 23 straight months of private sector job growth. so can you talk about the balance that the president took in proposing the budget the way he did, and in the alternative, the way we have heard others propose a we should essentially get the debt reduction purely
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through cuts. >> two very important questions in this context which is can you do fiscal consolidation responsibly without doing anything for growth in the short-term and without a balanced back equals revenue and our answer is no. and the reason why we feel that way is we have an economy still healing from the unemployment crisis. we have not been able -- proposed like we did in the payroll tax cut and we proposed the last three years, a series of measures to help job creation right now. you have to do those in a way that's responsible you have to make sure that you pay for them and you want to make sure they're tied to long-term reform so people have more confidence. that's why we propose a combination of long-term reform married with long-term reforms to address our long-term
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deficits. our second key for growth, although we disagree on this, is should you do it with balanced package, modest revenues, more spending cuts? or an only spending cuts -- if you do it with no revenues, though, you have to ask yourself if you're going to keep the same deficit targets. and your side wants to go much deeper in the deficit and then you have to cut spending much more deeply and you will find it very hard to find $1.5 industrial kbron to $1.9 trillion from medicare, from infrastructure, and when you do it you would do amount of damage to the economy. >> just in my last 45 seconds, as we have heard expressions of ronald reagan and his approach to addressing economic recessions, i want to quote him
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in 1985, we're going to close the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their share fair share. in theory, some of them was -- that's crazy, it's time we stopped it. i couldn't have said it better myself and i yeelield back the balance of my time. >> he was selling tax reform, presidential leadership saying lower rates, broaden base, precisely what we would love to see. >> i think we should remember some of the adjustments he made was to tax capital gains and dividends, at the 28% level the same rate that the bus driver was paying there, in other words he wasn't showing preference to hedge fund owners and others, hi said everybody needs to be treated coolly.
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>> the tax rate is 30%. >> it's 28% level. >> the balance, defining balance, is spending that's less than or equal to revenue. that's about 99% of americans would probably agree with that. when does the obama budget balance? >> it doesn't balance for the next ten years. >> does it balance in the next 20 years. does its balance in the next 75 years? >> it depends on what choices the congress makes. >> in your budget, when does it balance. you're right, we don't achieve balance in ten years, and we don't know how to do that. >> the answer is never does it
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balance. one thing i want to talk about, though, a lot of times we hear a lot of the information from you, mr. secretary about what it's going to do to the economy if we do the following initiatives and if we don't, tomorrow will be the third anniversary of what you and the administration projected would be the economic salvation of this country, that would be the passage of the stimulus package. and i wonder if we could put a chart up to see what the results have been from that package. if you look at that chart, and again, this is the prediction from your office, from your president, as to what would happen if he passed this -- >> when you find out the end here, and these are just numbers, but when you get to the end, you see we have on obama
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jobs deaf situation of 5.4 million americans out of a job. look at that tax rate, we were promised at in time that we would have over 6%. hope you you have something in the budget that -- can you tell me which tax increases that you're proposing, which tax increases will help eliminate the obama jobs deficits? which ones will create new jobs for americans? >> let me start by referring you to cbo analysis. of the economic and back to the recovery act. and they both agree that the recovery act helped substantially in restoring growth of the economy and saved
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millions of jobs. >> your question is about tax increases. these are your numbers not mine. i was not up here. could you explain which tax increases will close the obama jobs gap? we were promised an additional $5.4 millions that didn't appear. can you describe, your $1.5 trillion in tax increases -- >> mr. secretary, this is your number, not mine. this is your number. >> if the gentleman will yield. >> it's the roamer and burn -- >> the right question is did the recovery act -- >> answer the correct question, mr. secretary. mr. secretary, these are your numbers and the numbers in your budget are based on a similar
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philosophy. tell me which tax increases are going to create new jobs? >> the budget -- spending and tax reforms combined with investments, and you can ask cbo if it would be good for growth or not. >> honestly i hope you're right. but you're 5.4 million jobs wrong. you're wrong again and again. for this room it's about numbers. for the people in america, it's about real jobs for their families. >> i would say an adolescent perspective on how to think about economic policy. the right question is -- >> mr. secretary, let me tell you a quick story from somebody who's been in the private sector and helped create jobs, which i understand is not your background, you never started a business. but joe in kansas city said if that the president raises the
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tax there's seven people that he won't hire because of your tax increases. you can sigh that that's not going to happen, you convince joe in kansas city, it doesn't work in your stimulus package, and i don't think it's going to work again. thank you, i yield back my time. >> could we go back to figure 8, please? i guess not. figure 12? this happens. >> you can start. i'll catch up to you. >> i just want to understand and this has been alluded to a few times. but figure 8 is fine. these are the numbers we projected from our numbers last year. and it's in contrast to what would happen if we did nothing. so you see, as you mentioned earlier, with the baby boomers retiring at 10,000

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